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Nio Shares Trade Higher On Report of Chinese Factory Deal Talks

Shanthi Rexaline

Nio Inc – ADR (NYSE: NIO) shares, which are struggling despite the encouraging third-quarter delivery numbers reported last week, were seeing some positive momentum Tuesday.

Nio stock tumbled 20% Sept. 24 after it reported disappointing second-quarter results and announced restructuring initiatives, including plans to eliminate jobs.

Augmenting Capacity?

Some of Tuesday's optimism can be traced back to a report in the National Business Daily of China that said the Chinese electric vehicle maker is in talks with the Wuxing District of Huzhou City in east China regarding a 5-billion-yuan ($707 million) investment.

The deal envisages setting up a factory in the district with an estimated annual capacity of 200,000 units, NBD said, citing the tech website 36Kr, which quoted both Nio executives and the district officials.

Nio CEO Li Bin was tightlipped about the deal when contacted by 36Kr, but confirmed that the company is in talks with several local governments, the report said.

Nio sells two EV models: the ES6, a five-seater EV launched in June, and the ES8, a seven-seater EV.

Third-quarter delivery numbers revealed sales of 4,196 ES6s and 603 ES8s, with a total of 4,799, exceeding the guidance range of 4,200-4,400.

Even as analysts and the press debate about the solvency of the company, reports of fresh investment could allay doubts among investors.

Nio shares were 2.3% higher at $1.56 at the time of publication. 

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Photo courtesy of Nio. 

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